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Ognian Donev: Pro-generic medicine policy favors society

22 June 2015

According to one of the purposes of the latest healthcare strategy, Bulgaria has to spend more public funds for medical treatment of patients with generic medicines, which are much cheaper than the original drugs. Thus, this country would be able to save a substantial amount of money. Chairman of the Board of Directors of Sopharma pharmaceutical company Ognian Donev told Radio Bulgaria that the authorities have to put more efforts into the country’s pro-generic medicine policy: “We are still waiting to see real policy in this field. The authorities must find a suitable solution, which would be in favor of the Bulgarian patients and reach a balance between the use of innovative and generic medicines. Any pharmaceutical company can produce generic drugs when the patent over a given original product expires. It usually happens 20 years after a given original drug appears on the market. The Bulgarian Drug Agency ascertains the equivalence between the original and the generic drug. Consumers must be well informed before they make their purchase and be aware that they can pay different prices for the same active substance. If there is a deficit of money in a given system, the authorities should allow people to benefit from cheaper medical treatment. The contradistinction between generic and original medicines has been going on for many decades. Some consumers still believe that the original product is better than the generic one and are not aware that both medicines have the same active substance. We support the use of both products, because some new medical treatments require the use of innovative chemical molecule, which is expensive. That is why the society must make savings, whenever possible. This is where all producers of generic drugs, including our company, can be helpful.” The new health reform envisages the establishment of a centralized electronic system, which is to purchase medical equipment and drugs for the needs of the Bulgarian hospitals. In Ognian Donev’s view, this is a very reasonable idea. The company which offers the lowest price and most favorable conditions would win the public procurement order. However, this measure would result in higher concentration within the pharmaceutical sector. Currently, 85% of the deliveries to hospitals and drugstores are carried out by 4 large companies. The total number of the companies functioning in this field is around 300 to 400. Therefore, companies who can afford to make economies of scale would be able to compete successfully at these public procurement orders. Bulgaria is among the EU countries with the highest Value Added Tax on medicines. Should this country reduce the VAT on drugs, or at least introduce a different VAT rate on certain medicines? “Bulgaria is among the EU countries which levies the full VAT rate of 20% on its drugs. Meanwhile, many sectors of the national economy insist that the authorities must reduce the VAT on their produce. Unfortunately, the local administration does not have enough capacity to use different VAT rates. That is why I do not believe that we will witness different rates in this industry any time soon. If this country adopts different VAT rates, it will have to increase the number of its public administration, which is not a good idea. Tourism is the only sector in Bulgaria, which managed to adopt lower VAT rate, which helps this country accumulate higher volume of foreign currencies. With regard to the healthcare industry, I believe that the country must use most of the public financial resource for the treatment of socially-significant diseases. Foreign countries say that Bulgaria has exotic healthcare fund, i.e. this country spends most of its public resource to treat illnesses which affect a small group of the Bulgarian society. Although it is difficult from an ethical point of view to define which disease is socially-significant and which one is not, the authorities must spend most of the public money on the treatment of cardiovascular illnesses, or ones which affect large groups of the Bulgarian society.” The export of Bulgarian pharmaceutical products to Ukraine and Russia has dwindled a lot over the recent months. In Ognian Donev’s view, this was due to the depreciation of the local currencies. As a result, the solvent demand of the population of these countries has fallen. Bulgaria’s tourism has been also negatively affected by the depreciation of the Russian Ruble and the Ukrainian Hryvnia. “In that case, the family budget becomes scarce and people are not able to buy expensive imported goods. That is why we should not look for other reasons behind this crisis, such as political relations, etc. As a whole, the companies from the pharmaceutical sector are privileged to some extent, because our produce falls within the category of the first necessity items and if people have to make savings in their family budgets, they will limit the purchases of luxury goods first, postpone travels abroad, etc. Should local authorities impose stricter regulations on the market of food supplements? “Usually we hear about such intentions when a given scandal erupts. The last case regarded the Bulgarian national weightlifting team. The food supplements are sold on the free market, but when a given supplement contains an active substance, which is an element of the medicine production, it must be controlled by the National Drug Agency, rather than by the Bulgarian Food Safety Agency. In other words, the producers of such products must be subject to competition with the manufacturers of pharmaceutical products. Manufacturers of food supplements who claim that their produce has positive effect over human health must prove that through a series of clinical trials.” http://bnr.bg